Where oh Where is the SCSU’s Budget?
by Silence Dogood

On the morning of December 12, 2013, the website for SCSU’s Office of Finance and Administration looked like this:

The important thing to notice is that, as of morning of December 12, 2013, there is not a single financial document for FISCAL YEAR 2014 FINANCIAL INFORMATION despite the fact that it is over five months into the fiscal year.

During the afternoon of December 12, 2013, the website was updated and information regarding Fiscal Year 2014 Financial Information appeared:

If you click on the link, you get the following MS Word document (which represents the public budget):

I’m certainly not a CPA but I’ve seen better budgets for student organizations on campus. This is the public budget for a $210 million regional comprehensive university. After seeing this document, my first thought was to ask the Accounting Department to look at this budget and make suggestions because even an undergraduate accounting major would likely come up with a more thorough document.

Recently, there has been some confusion as to the exact size of the SCSU budget. Since no budget was available until now, it’s a fair question. In an email to faculty on September 19, 2013, Provost Malhotra stated: “With a total operating budget of more than $210 million…” Later, in an article written by Dave Aeikens appearing on November 21, 2013 in the Saint Cloud Times, the following was written: “The university has a budget of about $150 million.” Clearly, these two different numbers gives rise to some confusion. Is St. Cloud State’s budget $150 million or $210 million? That’s a $60 million dollar question.

On November 27, 2013, Patrick Jacobson-Schulte, Associate Vice President for Financial Management and Budget responded to a university listserve “If there is confusion, St. Cloud State has a total Annual Operating Budget of $210 million. This is comprised of a General Fund Budget of $150 Million, and an Auxiliary/Enterprise budget $60 million.” The $60 million dollar question is now resolved.

From MnSCU Board Policies 5.10 Reserves and Year-End Balances, it states:

“Part 2. Overview It is the policy of the Board that the Minnesota state colleges and universities shall maintain an appropriate portion of general fund balances designated as a reserve for which no use is presently planned.”

“Part 3. Accountability/Responsibilities The president at each college and university is responsible for maintaining a portion of the college or university resources as a reserve. A college or university general fund reserve should be five to seven percent of the previous year’s general fund operating revenues.”

Based on the SCSU budget document, the general fund reserve should be a minimum of $7,316,431 to a maximum of $10,243,003.

At Meet and Confer a budget document was presented, a part of which is shown below:

This document lists a reserve of $10,500,000. So it looks like the university is $256,886 above the recommended maximum amount allowed by MnSCU policy.

From MnSCU Board Policies 5.10 Reserves and Year-End Balances, it states:

“Part 4. Level of Reserves. Any college or university with a general fund reserve below five (5) percent shall report to the vice chancellor – chief financial officer information on current fiscal conditions with a detailed plan to achieve a minimum level. Any institution seeking to maintain reserves above seven (7) percent must have a plan approved by the vice chancellor-chief financial officer.” As of yet, no plan has been shared.

However, there is another perhaps even more serious problem. If the reserve is $10,500,000 and as shown in the FY 2013 Ending Balance and Carry Forward Decision FY 2014 Document, this represents 6.31% of the total budget, the total budget would then be $166,402,536. So is the budget $166,402,536 or $146,116,203? However, if the budget is actually $210,238,118 then $10,500,000 represents 4.77%, which is below the minimum amount required by MnSCU Board Policy. Clearly, simply deciding on what the budget is and what the percentage the reserve is of that budget is confusing!

In looking at the public budget, it is clear that the document has serious problems.

First, in FY13 it shows that the university had an operating profit of $4,556,769. But it doesn’t show where that money went or where the $10,500,000 listed at the September 5, 2013 Meet and Confer is located. Also, where are the reserves prior to FY13?

Secondly, for FY14, there is $64,121,985 in “Other Funds” Revenue compared to $38,087,298 for “Other Funds” Revenue for FY13. This is an increase of $26 million dollars and represents a growth of 68.4%. Further, of the total revenue for FY14, $73,317,472 out of $210,238,188 or 34.9% comes from “Other Funds”. Maybe someone was really lucky at the casino. With the budget information presented here, this seems almost as likely a scenario.

Finally, personnel costs increased from $121,061,147 in FY13 to $140,582,832 in FY14. The difference is $19.5 million dollars and represents an increase of 16.1%! So there should be either an awful lot more faculty and staff walking around campus or the ones that are walking around got a pretty nice pay raise. At Meet and Confer on December 12, 2013, President Potter responded that the increase was due to increases in salary. Yes, faculty and staff certainly got raises amounting to slightly more than 5% in salary. The cost of benefits also went up slightly. Additionally, some faculty were promoted leading to a slight increase in costs as well. Maybe, these increases can explain 8%(half) of the 16% increase. Where’s the remaining 8% or $9,750,000? It is also important to note that the budget for the last biennium included money that was set aside for salary increases and this should have been accounted for in the Carry Forward but the public budget shows a “Carry Forward of “0”. The document presented at Meet and Confer on September 5, 2013 shows $3,298,409 in “Income account carry forwards”. Again, there is a multi-million dollar inconsistency.

At Meet and Confer, President Potter also said that this budget was the budget that was sent to MnSCU last Spring. However, this budget never came to the Budget Advisory Committee and was not presented to the faculty at Meet and Confer. It is very easy to check the veracity of this statement because the agendas and minutes for Meet and Confer are available for review on the SCSU Faculty Association website. The Budget Advisory Committee agendas and minutes are available for review on the website for SCSU’s Office of Finance and Administration.

If you click on the information tab for the budget document, the following information is obtained:

Clearly, it shows that the document was created on Thursday, December 12, 2013. Maybe some of this information came from some earlier document but it certainly is not the document that was presented last Spring. This seems to contradict what the President stated at Meet and Confer.

Several important questions come to mind about the financial information that has been provided by the university. Why isn’t the university sharing complete and accurate budget information with the faculty as required by Article 6 of the Master Agreement? Why was it more than five months into the fiscal year before any kind of budget was presented? Is there really no “Carry forward” in the budget? Why did the budget information that was presented at Meet and Confer on September 5, 2013, again at Meet and Confer on October 9, 2013, and the Budget Advisory Committee Meeting on October, 30, 2013, all show a deficit and the need for budget reductions when the budget supposedly submitted to MnSCU last Spring showed a balanced budget?

The Figure below presented by the administration at Meet and Confer on September 5, 2013 and again on October 9, 2013, clearly shows a deficit.

Tammy McGee, as Vice President for Finance and Administration, who only been on the job since November 18, 2013 certainly faces a daunting task. Will Tammy be allowed to be truly “open and transparent” with budget information or will the budget obfuscation of the past continue?

2 Responses to “Questioning SCSU’s official budget”

  • Crimson Trace says:

    Silence Dogood to SCSU is what Deep Throat was to the Nixon Administration…a very credible source. SCSU is ripe for an audit.

  • Crimson Trace says:

    First the budget and now there is controversy including bullying and intimidation surrounding a student vote at SCSU for athletics? And the judiciary committee can no longer meet to verify the vote? Wow! You couldn’t get this out of a textbook in a classroom. Nothing like OJT for our young people. http://www.letfreedomringblog.com/?p=15728

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